State Reform in Turkey:

Reasons, Needs and Strategies

 

 

Firuz  D. Yasamis, Ph. D.

Associate Professor

School of Arts and Social Sciences

Sabanci University

Turkey

 

 

 

 

 

 

 

ABSTRACT

The state structure in Turkey including all its branches of government (executive, legislative and judicial) at both the national and local levels has shown to be ineffective, and even irrelevant, to the ingrained demographic, social, economic and political exigencies of the country. One of the main reasons behind this is the collapse of public finance. Conventional rhetoric limiting solutions to administrative reform fails to provide sufficiently broad enough context within which public sector reform in Turkey can be discussed. Turkey’s determination to become a full member of the EU also necessitates a comprehensive and radical overhaul of the Turkish public sector in the areas of efficiency and productivity. Five main strategies are proposed to assist Turkey in overcoming its state governance predicament: initiating and carrying out a state-wide reform by employing modern principles of public management; understanding and solving the problem of internal and external debts; enhancing the conditions of governance, reintroducing and strengthening the principle of meritocracy in public sector; and cooperating more with the EU.

Given the present social, economic and political conditions of the world, the term “public administration reform” is conceptually inadequate to delineate the extent of the problems faced by public sector organizations in their attempt to meet the need for more productive, effective and efficient utilization of scarce public resources. As indicated by the World Bank Report and others (see World Bank 2000, Christensen 2001), reforming public institutions requires comprehensive and integrated works rather than dealing with the crucial issues on piece-meal basis. This is especially valid for developing countries, where the task of poverty eradication is of paramount importance, while the sources available to do so are rather limited. This combination thus creates an enormous burden on the establishment of corruption-free and merit based governance in these societies. This view also shared by Crase (1999) in addition to another World Bank Report (1997) which best summarizes this bare fact: “Around the World, the state is in the spotlight. Far-reaching developments in the global economy have us re-visiting basic questions about government: what its role should be, what it can and can not do, and how best to do it.”  OECD shares the same opinion (OECD 1985, 1994, 1995a, 1996a, 1999, 2000). Moreover, the World Bank public finance reform programs have the same goal all over the world.

With respect to state governance reform, priority should be on solving public finance problems through comprehensive and coordinated efforts. While perhaps more evident in those countries in transition from a collective economy and central planning system to a market economy and for the developing southern countries, the more prosperous northern countries of our globe are not immune from having to make similar considerations with respect to the use of limited public revenue (Gore 1996, World Bank 1997, 2000).  However, as measured by Transparency International (TI), governance, many societies fall short of this expectation. The main reason for this is effectively explained in a World Bank Report (2000): “In countries where institutions are weak, policymaking and resource allocation typically proceed in nontransparent ways, with decisions generally skewed in favor of those who are well connected to centers of power.” As Caiden (1969) and the World Bank (1997, 2000) and several OECD reports have pointed out in this context, while the executive functions of public administration have conventionally been the main concern of reform efforts, it is necessary to embrace both the legislative and judicial functions as well. In turn, this will ensure that the basic requirements of decent governance and better functioning operational practices in the state apparatus are achieved (Jenkins 1995, Kettl 2000).

 

The Main Reason for State Reform in Turkey: Shortage of Public Resources

The conditions described above also apply to Turkey, which is a very good example of the countries where comprehensive overhaul of public administration is necessary. All components of state governance, ranging from the executive, legislative and judicial components, to the administration of the national economy are to be evaluated in depth. At the moment, the most serious problem Turkey has is the critical shortages and bottlenecks encountered in public finance. The charts given below indicate the conditions of public finance in Turkey. (1)

INSERT CHART 1 HERE

As indicated in the Chart 1, in 1980 the revenues of the state were almost equal to those of spending. However, 21 years later, mainly due to the economic, financial and social policies applied between 1984 -1992, the situation is now very different. The ambitious developmental projects, expensive infrastructural investments and social policies have created considerable burden on the public finance. Internal and external debts have been used to finance the domestic consumption and public employee salaries. Resultantly, inflation rate has been skyrocketed to 150s likewise the interest rates. This spiral continues at the moment. However, IMF and World Bank imposed austerity measures aiming at setting limits for state expenditures and increasing tax revenues began to create impacts and due to the lowering level of people’s purchasing power, the inflation and the interest rates have gone down to 30s. At the moment, instead of relative equality, there is a gross discrepancy between the state’s income and expenditures.

INSERT CHART 2 AND 3 HERE

Charts 2 and 3 above analyze the revenue structure of the state. The revenues have increased during the last 20 years. However, Chart 3 is most strikingly indicative of this structure. As of 1990s, the share of the indirect taxes in the total tax revenues has exceeded the income obtained from the direct taxes. This basically means that there is no further room for increasing the direct taxes on wealth, profit and income and only way to increase the tax revenues is to get more taxes from consumption. This also means that the state has reached the upper limits of its extractive ability. Charts 4, 5, 6 and 7 below are reflective of the conditions of state expenditures.

INSERT CHARTS 4,5,6 AND 7 HERE

Chart 4 reflects the structure of state expenses. Total expenses have increased four-fold during the last two decades. However, the investments have remained constant. Current expenses have increased almost two-fold. Conspicuously, transfer payments, which consist of interest payments on domestic and external debts and transfers to the State Economic Enterprises (SEEs) and other transfers, have increased almost ten-times. No increase in investments and a limited increase in current expenses indicate that public spending has been severely curtailed, thus causing serious bottlenecks and quality problems in public services and public infrastructures. Chart 5 illustrates the situation on current expenditures.

The increase in current expenses is mainly due to the increase in personnel expenditures especially in the period of 1985-1990. The number of public employees has increased in the mean time to alleviate the pressures on politicians and public administrators for more job opportunities. Since the quality and the quantity of public services is determined by the low financial resources, this result basically indicates the mismanagement of human resources and scarce financial resources thus requiring a reform initiative for public personnel policy.

Transfer payments indicated in Chart 6 illustrates the most important features of the public finance in Turkey. Transfers to the SEEs are negligible and other transfer payments have slightly increased. However, the most salient development is related to interest payments, which have increased enormously during the last 20 years. Therefore, the main increase in public expenditures is basically due to the interest payments on public debts. Chart 7 shows the composition of the interest payments. The share of the foreign debt interest payments is bearable although increasing while the share of the domestic debt interest makes up the lion’s share of the composition of debt.  This means that the state is relying mainly on borrowing from the domestic financial markets to cover domestic debt services – a trend that is upwardly spiraling.

Chart 8 summarizes the public finance bottleneck in Turkey.

INSERT CHART 8 HERE

In Chart 8, three main parameters are compared: total revenues of the state, the share of transfer expenditures including interest payments and the share of interest payments. In 1980, revenues exceeded transfer payments while interest payments were negligible. However, in 2001, the volume of transfer payments was greater than the state revenues, a situation essentially caused by interest payments on domestic debts. At the moment, even the share of the interest payments is more than the total state revenues. Therefore, in Turkey, all the state revenues are basically spent for interest payments, thus leaving no opportunity for financing any other public spending except through further borrowing from domestic and external sources.  According to the latest budget performance data for the first quarter of 2002, state revenues were insufficient to finance the debt service of domestic and foreign debts, let alone providing for the financing of other public needs. The amount of interest paid for the debts reached 110 percent of budget revenues during the first quarter of 2002. According to the Ministry of Finance, in the period of January-March 2002, budget revenue increased 42.3 per cent compared to the same period in 2001. However, budget expenditures increased 159.7 per cent during the same period. The main increase in the expenditures was caused by the increase in the interest payments. Interest payments increased 243.9 per cent compared to the same period a year earlier. These results lead to two very important questions: “How will the needs of the people and the state be met?” and “What does all said above mean for the Turkish economy, public finance and state governance?”

 

Impacts of the Main Reason and Other Contributing Factors

The Administration

The conditions and parameters described above could create significant adverse impacts over the state governance in Turkey. The present situation indicates that public finance in Turkey is approaching insolvency. State revenues are inadequate to meet state expenditures. State debt has reached such a critical level that nearly all state revenues go to financing debt services. As a result, state governance needs to take appropriate austerity measures in the area of public finance. Possible measures may include a drastic reduction in public expenditures, which can be brought about, for example, by diminishing the number of civil servants, cutting the services and lowering the quality of services.

Moreover, due to an enormous decline in income-generating capacity, public financing is experiencing great difficulties just at a time when the cost of debt service is rapidly increasing as a consequence of the growth in public debt.

            The factors contributing to the situation described above are numerous. First, the state has experienced a decline in internal and external borrowing capacity, just as domestic debts have skyrocketed, making management of domestic debt increasingly more difficult. While international borrowing is still available, it is a very expensive option. The IMF and the World Bank have launched in Turkey an intervention program that is the most ambitious of its kind in the history of these institutions. As a result, Turkey has become the world leader in terms of money borrowed from international sources. It is not certain yet just how long the IMF and the World Bank will continue to assist Turkey in alleviating the economic predicament brought about by a shortage of hard currency. Therefore, at the moment, additional foreign or domestic borrowing potential of the country appears to be rather limited. What are more positive in the recent developments are the decreased rates of inflation and interests. Consequently, the exchange rate of the Turkish lira vis-à-vis the US dollar has somewhat stabilized, while the rate of domestic interest has fallen to somewhere around 30 %. These encouraging developments may alleviate the burden on the public service but for anytime in the foreseeable future, the paramount problem of eradicating the stock of domestic and international debts promises to remain. It also needs to be pointed out that the state cannot readily increase tax revenues as a means to solve the problem.

This set of circumstances requires that the Turkish State make critical decisions with respect to effective and efficient governance. And it cannot simply expect that tinkering with certain aspects of public administration will be adequate, given the seriousness of the problems it faces. Trends require an overhaul of the entire structure of the state apparatus. Its internal organization, including interdepartmental and intersectoral relations, must be revised. All of this demands a new understanding of what constitutes management and its procedures and principles. In order words, comprehensive public sector reform in Turkey is a must.

Wide-scale corruption is the second factor contributing to poor public sector governance in Turkey. Corruption goes against the very principles of bureaucratic ethics. One of the pillars of the bureaucratic ethics is the notion of meritocracy, which includes the principles of eligibility, competency, career and seniority. Recent researches by Okcesiz (1999) and “Turkish Foundation on Economic and Social Studies” (TESEV) (2001) conducted in this area emphasize the extent to which corruption and bribery have become a wide-scale social, administrative and political problem in all branches of the state machinery. Moreover, the semi-autonomous Council on Banking Affairs has revealed that the cost to the state of the recently bankrupted private banks is almost 43.6 billion US dollars (as of September 2003), which is nearly one-fifth of total debts of the Country. (BDDK 2003:12).

TESEV’s above-mentioned Report (2001) indicates that the Turkish people’s satisfaction with services provided by various public administrations throughout the country, and the faith of people in bureaucracy/bureaucrats is low. Furthermore, the dimensions of bribery and corruption have reached wide spread proportions, with the number of citizens who think that they are treated equally by public officials and who believe that the principle of meritocracy is applied in the case of public hiring is low. The National Security Council believes that corruption represents a serious threat national security. The President Sezer, at his opening speech for new working year of the Parliament October 1^st, 2003, has voiced similar concerns: “One of the most basic problems of the Country which has to be emphasized strongly and has to be struggled against collectively by all sections is the corruption which results is wasting the scarce resources of the nation while favoring private interests of some circles.” In parallel to the President’s view, the OECD also stated the same fact in various reports indicating when there is a scarcity of public funds, corruptive forces are likely to play an important role in the distribution of the national income (OECD 1994).

High levels of unemployment and a rapidly increasing population makes employment in the public sector rather attractive despite the very low salaries vis-à-vis the cost of living in the country. Likewise, contracting companies, which are dependent on public work projects, are under great financial pressures due to the diminishing ability of the state to make infrastructure investments. These social and economic dynamics have paved the way for an emerging intermediary class consisting of local and national politicians who work on the basis of commission taking the form of either financial or political rewards. (Yasamis 2001) All forms of corruption (ranging from bribery to nepotism and basic fraud to tampering with official documents and wire-tapping) can be observed in public transactions, including any kind of governmental compliance management activity.

A natural consequence of this is that the principles of meritocracy have failed to become embedded in the state machinery. Eligibility, for example, is not the main factor considered when making appointments to public posts. Rather, it is political fidelity that determines who gets appointed to well-paid senior-level positions. (Tutum 1994) Similarly, competency, even where it is a necessary aspect of a post, is not the sole consideration. On the contrary, the criteria for selection and promotion are the desire to divide and share the “public pie” with “friends.” As was seen in the notorious  “Susurluk” (3) scandal, public officials can set up ties with illicit forces and attempt to use the public power of their official duties to get their share of  “profits” made on the “black market.” What remains consistent in this nexus are some politicians who have considerable superiority in establishing and maintaining contacts between bureaucrats, entrepreneurs and “mafia-like” illegal organizations.

Another indication of the corruption in the public sector is the newly established decentralized (“distributed public governance” as termed by the OECD) bodies. (OECD 2002) These ‘supreme committees’ are relatively autonomous vis-à-vis the central government and therefore the political pressure held over these bodies is intended to be limited. The plethora of recently explored autonomous “supreme councils” in the public administration is basically due to the attempts to break the controlling power of some politicians over public resources and interests.

            The economic dimension or economics of the corruption apparently is rather considerable, so much so that it has reached a point where it has begun to adversely affect the national economy. There is, however, no extant report on the economic dimension of the corruption published within Turkey. However, the works of UN ECOSOC and other UN bodies (UN-ODCCP 2001), IMF good governance activities, anticorruption works of the World Bank, OECD and TI (2003) provide some insights on the issue. All agree that it is rather difficult to assess the economic parameters of a secret transaction and therefore an exact description is complicated, if not impossible. However, again all agree that corruption hits hardest the poor but the rich least and also that there is a strong correlation between levels of corruption and lowered economic performance.

All these indicate that there is need for bureaucratic reform. Without such reform, Turkey will continue to suffer economically. Therefore, the long-used concept/paradigm of “Administrative Reform” should now be replaced with a new concept of “State Reform” in Turkey with strong remedies for corruption.

The third primary factor contributing to poor public sector governance in Turkey and that therefore demands state reform is institutional. The organizational structure of public administration was essentially shaped during the second half of the 19^th century under the Ottoman Empire. These structures are now outmoded, inefficient, ineffective and heavily centralized.

Two important studies of TODAIE  (2) indicate that since the advent of the Republic, the structure of the central government has evolved and matured only incrementally (1963, 1991). The Provincial Special Administrations (PSA, the province level local government) were modeled, experimented with and codified between 1856-1876. The final version of the Law on the PSAs was codified in 1913 and this law is still in effect today. Municipalities, although they experienced significant modifications later, were first initiated towards the end of the 19^th Century. “The Code of Municipalities” was enacted in 1930. Likewise, “The Code of Village Administration,” enacted in early 1920s, is one the primary codes of the Turkey.

Since the establishment of the Republic, excessive centralization in public service provision has been re-explored and re-institutionalized. The need to utilize scarce public resources in a more productive manner, to establish essential infrastructure and industries, and for capital to make an efficacious contribution to national economic development are the main roots of excessive centralization in Turkey. While excessive centralization remains a problem in Turkey, the original assumptions underlying the need for such centralization are no longer valid or relevant given the contemporary social, political and economic realities of the country. Compared to 80 years ago, the economy has changed dramatically, the standard of living has improved considerably, and well-entrenched social and political transformations have occurred. Hence, the classic concept of “Provider and Protector State” has changed into the concept of “Enabler State.” The conventional and classic role of the state and the considerably large share of it in the public economy are now being questioned. Within this context, there has arisen a perceived need for a devolution of public services and authority out of the hands of politicians in the capital toward more control over those services and authority being vested in local governments. The first dynamic is the product of requests made by new democratic elements of society for more public participation. The second, on the other hand, is being made at the behest of circles opposed to the nepotism flourishing in the capital that skews the distribution of scarce public resources to their own political cohorts.

As indicated by Michalski (OECD 2001:7-28) and by Tarschys (OECD 2001:30), public administrators are eager to retain maximum power and authority in their own hands and are reluctant to delegate to lower echelons, even within the same state institution. Consequently, the center becomes burdened with an excessive workload, which produces delays, confusion, ambiguity and frustration amongst the decision makers as in the case of Turkey. It is being observed that red tape, “non-transparent” working conditions and the general lack of trust in the ethical and moral integrity ordinary citizens and employees exhibited by public administrators create conditions whereby recipients and providers of public services alike suffer from excessive centralization. Accordingly, this kind of trends require a fundamental restructuring of overall public machinery, including the powers, authorities, responsibilities, the legal statutes, and the relations amongst the public bodies in every country regardless the level of development.

The fourth factor that makes overall public sector reform a necessity, as indicated by a report published by the Turkish Association of Industrialists and Businessmen, (TUSIAD 1995), is that ineffective, inefficient and nonproductive management practices have given rise to expensive and low quality service production in the public sector. The notion that public administration can actually have a scientific basis is generally not well developed in the Turkish public sector. This lack of development can be seen in the way individual public bodies are organized. They tend to be set up in a random manner and do not reflect any scientific theory of organization. Management practices are far from the modern, and contemporary understandings of management. Rather than being even incremental, decision-making is coincidental and biased towards political and economic interest sharing. Planning, either corporate or operational, is not dependable in the public sector. The most effective planning occurs only at the State Planning Organization (SPO) for the 5-year national development plans and the annual investment programs. However, daily operational planning of work based upon the concept of resource planning is minimal at best in public organizations. An exceptional development in this regard is the computerization occurring in public bodies. The rapidly enlarging computer-aided projects in the public arena do not intimidate managers and employees. Yet, the audit function is merely based upon legitimacy-controlling concerns and such audit concepts as “performance auditing” or “value-for-money” controlling have not yet found its way into the public sector.  (TODAIE 1991) As made clear by this report, there is an obvious need for a major revision in all areas of public sector management.

The fifth essential factor why reform of the public sector is imperative is the absence of effective financial management, planning and analysis ability in the public sector. It is clear from examining existing budgeting and accounting systems that they are unable to incorporate such essential ingredients of any modern management accounting system and cost/revenue centers. As indicated by the SPO (DPT 2000: 31), the cost (total or unit) of the public service provided usually is not a concern for the public administrators in Turkey. Moreover, revenue-generating activities are mostly looked down upon.

            The last but not the least factor contributing to the need for reform concerns the relations between Turkey and the EU. As a candidate country for full membership, Turkey is working hard to meet the Copenhagen criteria for accession and the adoption of the EU’s “acquis communautaire.” One of the Copenhagen criteria for accession is the improvement of public administration and in the public service delivery capacity of the candidate country.  (EU Commission, 2000)

 

The Parliament

Similar to the conditions for administration stated above, it is widely accepted that the legislative assembly in Turkey is less effective and efficient vis-à-vis the felt needs of the Country. (Yasamis 2001, Turan 2000) The Parliament in Turkey has two main tasks: to carry legislative works and to supervise the activities of the administration. The first task of legislation, although seems to be very effective under the vast majority of the single party at the moment, has been in crises several times in the past coalition periods. Inappropriate working procedures and the lack of faith between the parties in power and opposition results in lengthy and time consuming legislative activities. The second task of controlling the executive always became problematic and ineffective simply because the parties in government also have the majority in the Parliament thus causing ineffectiveness which basically prevents the emergence of the benefits expected from the principle of separation of the powers. The previously expressed position of some politicians and its reflections to the legislative activities has also created undesirable outcomes in the legislative activities in the past.

 

The Judiciary

The judiciary is also not immune from the defaults mentioned earlier. The criticism over the judiciary is basically concentrated on the following issues: the lower level of effectiveness of rule of law state and the supremacy of law state principle, as well as distributing the justice in the society, reservations over the full realization of the principle of independence of the judges, inefficiencies in the management of judicial services, inappropriate institutional setup, complex judicial bureaucracy and excess red-tape, insufficiency of salaries and wide-scale corruption in judiciary. (Yasamis 2001, Okcesiz 1999, TESEV 2001) All these also indicate the need for a radical reform in the third important branch of the state, i.e., the judiciary.

 

The Needs to Be Satisfied by State Reform

The factors laid out above create several political and administrative needs that have to be met. These are needs that are perceived by the public to be the main obstacles to effective, efficient and productive state governance in Turkey.

The first and the most important need is for more rational and effective utilization of scarce public resources. (TODAIE 1963, 1972 and 1991) Public resources are now more limited than ever before and will continue to be so in the foreseeable future. Therefore, the disposable state income for public investments and social transfers is very limited, if not completely unavailable.

There are several other factors that make the situation more complex. These factors are called the “holes” in the central government budget. The first big hole is the compensation provided by the central budget for the losses of the State Economic Enterprises (SEEs). Almost all of them are operating in the red, with negative balance sheets, with their losses being met by the central government.

The second “hole” is related to the local governments. In Turkey, local revenue base of the local governments is virtually low and the local governments are mainly dependent on the income to be derived from the central government in terms of either having a share from the nationally collected taxes or grants-in-aids (sometimes compulsory payment of the local governments’ centrally insured international debts from the national budget). Therefore, financing the local services has always become a concern for the public finance in Turkey. (TODAIE 1992, TUSIAD 1992)

The third “hole” in the national budget has been created by the social security system of white and blue-collar workers and the self-employed. Since the system is not self-sufficing, or self-financing, all social security institutions in Turkey are substantially financed by the central government, which, of course, is another financial burden and source of “leakage” of state revenue.

The collective and cumulative impact of the unfavorable conditions of the public finance and the above described “holes” basically means that resources are extremely limited vis-à-vis the social and economic needs of the people.

The second need to be satisfied is related to public management. Fundamental to initiating this process of public sector reform is inculcating within those who work in the system with a sense of what constitutes “good public management.” The dysfunctional principles, values and assumptions of the “old guard” must be replaced with modern ones that emphasize efficiency, productivity, efficacy as well as accountability and transparency. Peoples right of getting information and participation in public decision making are somehow not satisfactory. Because public policy decisions are not made openly, the public interest may not always be the sole criterion in decision-making. This makes it difficult for public officials to be held accountable to the people who are to be affected by policy decisions. Limiting this access and participation, the public stands to remain isolated from the very institutions of governance whose function it is to serve it. (OECD 1987)

            Thirdly, public sector reform also necessitates the inculcation of meritocracy in bureaucracy. Accordingly, there needs, for example, to be a comprehensive and unquestionable re-institutionalization of the principles of eligibility, competency and seniority within the civil service career system.

            The fourth need is related to the quality of policymaking, policy implementation and even the “politicians” themselves (Yasamis, 1997b). Because of the cynicism and contempt the general public has of what they view as self-serving politicians, even the merits of democracy are questioned by the ordinary man on the street. IMF seems to be having a closer outlook on the issue and therefore trying to insolate the politicians from the day-to-day operations of public administration in their negotiations for the new credit schemes.  Mr. Kemal Dervis, the former minister without portfolio responsible for the economy, stated that such autonomous public bodies were designed with such a purpose in mind. The latest example also indicates that some incremental reforms are occurring in the public sector meanwhile. However, such reforms have not been sufficient to curb the excessive influence politicians have on administrative decisions.

            The fifth need for public administration reform concerns relations with the EU. The EU’s main principle regarding the overall structuring of services and functions is that of “subsidiarity.” This principle, when translated into the internal public organization of member states, means that public services should be provided at the closest point to the end-users or beneficiaries of these services. Simply, this principle means maximum deconcentration of public responsibilities ordinarily concentrated in the Capital, with maximum decentralization of public services from the central government to the local governments.

 

Strategies of State Reform

Why reform of the public sector in Turkey is imperative and what promises to be satisfied as a result of a better and more effective functioning of that sector has been laid out above. What is more difficult is determining the strategy to be followed for realizing a meaningful state reform in the country. (TUSIAD 1995) It is also necessary to appreciate that this reform effort will be a rather complicated one requiring substantial political will, bureaucratic effort and financial input. The strategy, or strategies, to be developed and implemented will also be rather complicated and cumbersome (OECD 1999 and Jenkins 1995).

One possible way to approach public sector reform is decentralization, which aims at devolving many of the public services conventionally provided by the central government to local governments (TUSIAD 1992). In practice, what this means is providing local municipalities with the necessary discretionary powers, as well as financial authority and capability to be able to efficiently use available resources and seek additional ones in order to make and carry out efficacious policies having a positive and meaningful impact at the local level. At the same time, however, this requires reform of local administrative units, particularly local municipalities, which continue to form a significant component of the Turkish state apparatus. Such reform of local governments and the “intergovernmental” relations within the Turkish state apparatus, however, is an enormous task that will require concerted effort on the part of both local governments and the central government in the capital. In order for such reform to be carried out, local governments first have to be strengthened and empowered in a number of areas. Strengthening and increasing the effectiveness of the financial, organizational, managerial and resource planning capabilities of local government is yet another direction towards which reform of the Turkish state sector can take. Similarly, diminishing the supervisory tutelage of the central government over local governments (Yasamis, 1997c) can contribute to the rise of more confident and robust local administration.

Likewise, delegating such administrative powers and services generally concentrated in the capital as planning available resources, making budget proposals, procurement, hiring new personnel, human resources management and auditing to the field units of the central government can have a positive impact on de-concentrating the public sector and making it more administratively responsive to local needs.

 

Strategy 1: Reforming state governance

Carrying out state reform is never easy and not always successful (OECD 1995a) since the task requires strong political will and the processes involved are complicated. In Turkey, for instance, such reform can only be attained if it is all encompassing, including all branches of the state simultaneously since all these branches are adversely affected by the same factors. This is especially valid for parliamentarian systems in which the same political parties in power control the executive and the legislative branches of the state. In the case of Turkish judiciary there is a widespread consensus on the necessity of radical shake up in all related circles.

Reforming state governance requires the adoption of new concepts and understandings in three important areas. First, reducing the share of the public sector in the overall economy is an option that can be considered. This has the potential of increasing market competitiveness. Companies in the private sector can be encouraged to provide services ordinarily provided by the state in its monopolistic capacity of provider of public services. What could change using this strategy are the areas in which the state would continue to provide services. These areas mainly include what are considered “essential” public services. Even among these, many can be transferred to other decentralized bodies or even to the private sector (TUSIAD 1995, Yasamis 1997a).

Second, a redefinition of the role and status of the central government can be promoted as a consequence of the reduction of its share in the economy and as monopoly provider of public services. Since the establishment of the Turkish Republic in 1923, the central government has assumed the role of promoter of social change and economic development in Turkey. Economically, this mission has included the construction of essential industries and fundamental infrastructure. Socio-politically, it has taken the form of promoting the creation and development of a modern western society. While this may have been an important role for the state to assume at the time, since then, the private sector has developed, sufficient capital has accumulated, and the technical capabilities of the country have expanded. Therefore, the importance of the role played by the central government as a promoter of social and economic development has diminished. Because of the growth in the capacity of the private sector to carry out many of the activities originally assumed by the public sector, there is no longer any need for the state to continue in its economy-promoting capacity. Turning over public sector activities to the private sector is important strategy to be considered over the coming years in Turkey. (TUSIAD 1992, 1995, Yasamis 2001) Therefore, decentralization of existing public services can form an important part of state reform. More power, authority and responsibility can be devolved and/or delegated to provincial and district representatives of the central government. Some of this devolution can be functional and some territorial. Ultimately, much of the power, authority and responsibility currently exercised by the central government can be transferred to local municipalities in the periphery in line with the principle of subsidiarity of the EU.  (TUSIAD 1992, TODAIE 1992, OECD 1987) In practice, what can be produced is a grid within which the central government and locally based public sector bodies, and the private sector can operate in a way that is more efficient and effective than is presently the case. Furthermore, the large-scale influx into urban areas has created unmanageable conditions (Yasamis 1996) in the urban areas of the country since early 1950s. (Yasamis 1995) The urban population has increased threefold while the ratio of municipal incomes to GNP has only doubled during the last 50 years. As a result, municipalities in Turkey have become to succumb to the pressures caused by urbanization (Yasamis 1991, 1992, 1993).  Municipalities have suffered the most in such areas as municipal finance, municipal organization, manpower, urban economics, urban engineering, urban planning and urban management. The situation is even more severe in big cities, metropolitan areas and in the Megalopolis of Istanbul. (Yasamis 1997d) Therefore, there is evidence to support the claim that municipal reform must make it possible for municipalities and other forms of local administration to become the primary provider of public services throughout the country. (TODAIE 1992) As a matter of fact, the present government has prepared a draft law on public administration (including local governments) reform on these bases. However, without the necessary conditions for full discretion of local self-governance, such an attempt at devolution may not be successful. In this regard, the future of Turkey lies in the merits and potential of strong municipalities rather than strong Provincial Special Administrations.

 

Strategy 2: Solving the problem of internal and external debt

It is obvious that this strategy requires radical changes in the management of the national economy. Therefore, this strategy also includes economic reform activities that are beyond the scope of this analysis to discuss. However, there are several possible administrative strategies to be followed in this regard as explained below. One effective approach in this regard seems to lie in the sphere of increasing private sector participation/involvement in the provision of public services. Existing public economic enterprises have become unproductive and costly to run. Therefore, one way of increasing their productivity (through curbing down unnecessary work-force and current expenses and adopting realistic pricing systems) thus reducing financial burden upon the national budget would be to privatize them by selling out or by transferring the right of operation to private companies when there is no any other way to make these institutions self-sufficing. The privatization attempts in Turkey have been futile and the income derived from the selling almost equal to the expenditures incurred. However, the case of ex-east Germany seems to be a good example in this regard where the outmoded state enterprises were sold cheaply and even some kind of financial subsidies were provided to the purchasers.

Another form of privatization in the public sector could be a push towards commercialization and corporitization of state-owned and operated enterprises. This would entail their transformation into companies working within the framework of private commercial law. As a result, instead of operation on a not-for-profit basis, they could be free to seek profits and distribute profit shares to shareholder or stockholders. Such a strategy would mean to employ more market-based management tools by the public administration.

 

Strategy 3: Enhancing the conditions of public management

The experiences of Finland, Australia and New Zealand had shown that modern concepts of public management, when adopted, offer several strategies and techniques that can enhance the performance of the governance function of the state.  (OECD 1999, Finland 1994, Marsden, Wood 1993) These concepts – known as “Public Management” or “New Public Management” – mainly include “accountable management”, “management-by-objectives”, “end-management”, “result management” and “performance management” (OECD 1987, 1994, 1995a, Frederickson, 1999). Ultimately, what is needed is a revamping of the structure and practices of public administration in the direction of what the total quality management approach calls “sustainable (or, continuous) development” (Bank 1992, Kettl 2000, Pollitt 2000). This requires a multi-level revision of the way in which public services are provided. Instead of creating new large-scale public bodies, priority ought to be given to constructing process-oriented organizational development techniques (Pollitt 2000). Organizational assessment, feasibility studies, and legislative impact analyses need to be performed prior to the launching of important reform projects and the seeking of legislative reform in the public sector. Furthermore, the promulgation and implementation of public service standards is an important part of state reform. (Grishankar 1999) This could include, for example,
“a charter for citizens” that indicates the basic rights of the people vis-à-vis public administrators, and the basic responsibilities of civil servants have respect to those seeking public services. Another might be an “administrative procedures law” that lays down the main principles and procedures of state governance and public administration (OECD 1996a). The auditing concept in the public sector could also be enhanced. The prevailing approach of controlling the legitimacy in public activities should also be strengthened with performance auditing approach thus insuring the re-appraisal of the public resources used. (OECD 1995a)

 

Strategy 4: Reintroducing meritocracy in public sector

Corruption and “bureaupathologies” existing in public administration in Turkey have reached such levels that not only is the provision of essential public services in jeopardy, but also the security and interests of the Country. While Turkey is signatory to a number of international accords (within the framework of the OECD, the World Bank and the EU) whose aims are to prevent corruption and bribery (OECD 1996b) in economic transactions, the necessary internal legislative preparations have not yet been completed for full compliance. An integral component of such legislation is the re-introduction of the principle of merit in hiring, appointment and promotion within the public bureaucracy. This includes as well, such principles as competency, eligibility, career and seniority. Accompanying the principle of merit must be the re-institutionalization of ethics in the public sector. (Mosher 1974)

 

Strategy 5: Cooperating and coordinating with the EU

A final strategy might be the acceleration of cooperation and coordination with the EU to reform and upgrade the service delivery capacity of the public administration. This will require enrichment and deepening of relations with the EU particularly in the area of state reform. As a candidate for full membership in the EU, Turkey is obliged to upgrade its public administration within the framework of the Copenhagen criteria for enlargement. There currently exists a discord between the European Union’s (EU) understanding of what constitutes contemporary European public administration and what is currently present in Turkey. The major points of disagreement need to be identified, addressed and reconciled so as to ensure that Turkey makes effective progress towards reaching the standards set by the EU. In this regard, the EU has developed considerable opportunities (including financial assistance from PHARE program) with which transition countries can seek assistance in public sector reform. Turkey can obtain considerable amount of knowledge and information from the experiences gained in other transition countries in public sector reform initiatives under the auspices of the EU.

 

Conclusion

Reform of the public sector Turkey is needed to insure a proper management of scarce resources and to prevent a decline in the quality of state governance. Effective resource management demands public finance that is based on proven principles. In Turkey, the financial resources available to the state are indeed limited and the future is not anymore promising. Therefore, the ultimate objective for the public administrators should be the maximization of economical, efficient and effective utilization of scarce public resources. Nevertheless, without ridding the system of corruption and reintroducing meritocracy, not only will the provision of public services continue to suffer but also public administration reform will remain futile. Overhauling public administration must be confronted on a number of fronts, including the legislative and judicial branches. State reform in Turkey requires nothing less than a full-scale reformation of its state apparatus.

 

 

Notes

 

1.     The data used in the charts is obtained from the Turkish Treasury.

2.     “TODAIE” stands for the Public Administration Institute for Turkey and the Middle East.

3.     “Susurluk” is an important symbol of corruption in Turkey. As a result of a judicial process, a court in Istanbul issued a verdict that some public officials had set up an illegal crime organization to realize their own personal interests by misusing the public statutes and authorities.

 

 

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Total word count: 8017

 

Title and abstract: 192

Text without charts but including notes and references: 7825

Text without notes and references:7024

 

Notes: 76

References: 725

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